As of November 19, 2013, the issuer had 158,439,702 shares of common stock outstanding.
TABLE OF CONTENTS
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Page |
Part I. |
FINANCIAL INFORMATION |
1  |
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Item 1. |
Consolidated Financial Statements |
1  |
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  |
  |
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Condensed Consolidated Balance Sheets at September 30, 2013 (unaudited) and June 30, 2013 |
1  |
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  |
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Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2013 (unaudited) and September 30, 2012
(unaudited) |
2  |
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Condensed Consolidated Statement of Stockholders' Deficit - July 1, 2013 through September 30, 2013 (unaudited) |
3  |
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Condensed Consolidated Statements of Cash Flows - Three Months Ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited) |
4  |
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  |
  |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
5  |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
15 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
18 |
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Item 4. |
Controls and Procedures |
18 |
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Part II. |
OTHER INFORMATION |
18 |
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Item 1. |
Legal Proceedings |
18 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
19 |
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Item 3. |
Defaults Upon Senior Securities |
19 |
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Item 4. |
Mine Safety Disclosures |
19 |
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Item 5. |
Other Information |
19 |
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Item 6. |
Exhibits |
19 |
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Signatures |
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20 |
i
PART I - FINANCIAL INFORMATION
ITEM 1 - Consolidated Financial Statements
CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
September 30, |
|
|
June 30, |
|
|
|
2013 |
|
|
2013 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
161,662 |
|
$ |
241,976 |
Inventory, net |
|
|
196,278 |
|
|
107,735 |
Prepaid expenses and other current assets |
|
|
- |
|
|
3,125 |
Total current assets |
|
|
357,940 |
|
|
352,836 |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
161,542 |
|
|
166,068 |
Patents, net |
|
|
70,670 |
|
|
70,315 |
Other assets |
|
|
9,500 |
|
|
9,500 |
Total assets |
|
$ |
599,652 |
|
$ |
598,719 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable & accrued expenses |
|
$ |
309,276 |
|
$ |
227,869 |
Accrued payroll and payroll taxes |
|
|
1,016,223 |
|
|
1,016,223 |
Convertible notes payable, net of discounts |
|
|
59,844 |
|
|
44,826 |
Related party payable |
|
|
1,147 |
|
|
1,147 |
Short-term loan |
|
|
34,521 |
|
|
34,521 |
Short term loan, related party |
|
|
185,000 |
|
|
185,000 |
Advances from distributor |
|
|
1,465,663 |
|
|
1,215,663 |
Total current liabilities |
|
|
3,071,674 |
|
|
2,725,249 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit: |
|
|
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized,
no shares issued and outstanding as of September 30, 2013
and June 30, 2013, respectively. |
|
|
- |
|
|
- |
Common stock, $0.001 par value, 1,000,000,000 shares authorized,
158,439,702 shares issued and outstanding as of September 30, 2013
and June 30, 2013, respectively. |
|
|
158,440 |
|
|
158,440 |
Additional paid-in capital |
|
|
17,484,058 |
|
|
17,484,058 |
Accumulated deficit |
|
|
(20,114,520) |
|
|
(19,769,028) |
Total stockholders' deficit |
|
|
(2,472,022) |
|
|
(2,126,530) |
Total liabilities and stockholders' deficit |
|
$ |
599,652 |
|
$ |
598,719 |
See accompanying notes,which are an integral part of these condensed consolidated financial statements
1
CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
For the Three Months Ended |
|
|
|
September 30, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(unaudited) |
|
|
(unaudited) |
Revenue |
|
$ |
- |
|
$ |
- |
Cost of revenue |
|
|
- |
|
|
- |
Gross profit |
|
|
- |
|
|
- |
General and administrative expenses |
|
|
312,765 |
|
|
361,906 |
Research and development expenses |
|
|
6,123 |
|
|
40,163 |
Total operating expenses |
|
|
318,888 |
|
|
402,069 |
Loss from operations |
|
|
(318,888) |
|
|
(402,069) |
Interest expense and other |
|
|
(26,604) |
|
|
(46,957) |
Net loss |
|
$ |
(345,492) |
|
$ |
(449,026) |
|
|
|
|
|
|
|
Net loss per share, |
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.00) |
|
$ |
(0.00) |
|
|
|
|
|
|
|
Weighted average shares outstanding, |
|
|
|
|
|
|
Basic and diluted |
|
|
158,439,702 |
|
|
165,089,134 |
See accompanying notes,which are an integral part of these condensed consolidated financial statements
2
CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited)
|
|
Serries A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred |
|
|
Common Stock |
|
|
Additional Paid- |
|
|
Accumalated |
|
|
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
in Capital |
|
|
Deficit |
|
|
Total |
Balance at June 30, 2013 |
|
- |
|
$ |
- |
|
|
158,439,702 |
|
$ |
158,440 |
|
$ |
17,484,058 |
|
$ |
(19,769,028) |
|
$ |
(2,126,530) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(345,492) |
|
|
(345,492) |
Balance at September 30, 2013 |
|
- |
|
$ |
- |
|
|
158,439,702 |
|
$ |
158,440 |
|
$ |
17,484,058 |
|
$ |
(20,114,520) |
|
$ |
(2,472,022) |
See accompanying notes,which are an integral part of these condensed consolidated financial statements
3
CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Three Months Ended September 30, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(unaudited) |
|
|
(unaudited) |
Operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(345,492) |
|
$ |
(449,026) |
Adjustments to reconcile net loss to net cash |
|
|
|
|
|
|
used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
24,493 |
|
|
14,166 |
Beneficial conversion feature on convertible notes payable |
|
|
- |
|
|
9,153 |
Amortization of convertible note discount |
|
|
15,018 |
|
|
- |
Fair value of options issued for services |
|
|
- |
|
|
39,842 |
Gain on change in fair value and extinguishment of derivatives liabilities, net |
|
|
- |
|
|
(14,291) |
|
|
|
|
|
|
|
Effect of changes in: |
|
|
|
|
|
|
Inventory |
|
|
(88,543) |
|
|
9,842 |
Prepaid expenses and other current assets |
|
|
3,125 |
|
|
- |
Accounts payable and accrued expenses |
|
|
81,407 |
|
|
(44,938) |
Accrued payroll and payroll taxes |
|
|
- |
|
|
185,696 |
Advances from distributor |
|
|
250,000 |
|
|
250,000 |
Net cash (used in) provided by operating activities |
|
|
(59,992) |
|
|
444 |
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(13,500) |
|
|
(21,989) |
Payments for patents |
|
|
(6,822) |
|
|
(11,050) |
Net cash used in investing activities |
|
|
(20,322) |
|
|
(33,039) |
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
Payments of bank loan |
|
|
- |
|
|
(68,000) |
Proceeds from convertible notes payable |
|
|
- |
|
|
53,000 |
Payments on convertible notes payable |
|
|
- |
|
|
(55,000) |
Net cash used in financing activities |
|
|
- |
|
|
(70,000) |
|
|
|
|
|
|
|
Decrease in cash |
|
|
(80,314) |
|
|
(102,595) |
Cash, beginning of period |
|
|
241,976 |
|
|
137,249 |
Cash, end of period |
|
$ |
161,662 |
|
$ |
34,654 |
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
3,000 |
|
$ |
5,770 |
Cash paid for income taxes |
|
$ |
- |
|
$ |
- |
See accompanying notes,which are an integral part of these condensed consolidated financial statements
4
CAVITATION TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Three months ended September 30, 2013 and 2012
Note 1 - Organization and Basis of Presentation
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") as promulgated in the United States of America ("U.S.") and with instructions to Form 10-Q pursuant to the rules and
regulations of Securities and Exchange Act of 1934, as amended (the "Exchange Act") and Article 8-03 of Regulation S-X under the Exchange Act.
Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the
opinion of management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation.
Operating results for the three months ended September 30, 2013 are not indicative of the results that may be expected for the fiscal year ending June 30,
2014. You should read these unaudited condensed consolidated financial statements in conjunction with the audited financial statements and the notes
thereto included in the Company's annual report on Form 10-K for the year ended June 30, 2013.
Hydrodynamic Technology, Inc. was incorporated January 29, 2007 as a California corporation. It is a wholly owned subsidiary of
Cavitation Technologies, Inc. (referred to herein, unless otherwise indicated, as "the Company," "CTi," "we," "us," and "our") a Nevada corporation originally
incorporated under the name Bio Energy, Inc. CTi has developed, patented, and commercialized proprietary technology that may be used in liquid
processing applications. CTi's patented Nano Reactor® is the critical component of CTi Nano Neutralization® System which is
commercially proven to reduce operating costs and increase yields in refining vegetable oils. CTi has two patented systems and has filed several national
and international patents to employ its proprietary technology in applications including, vegetable oil refining, waste water treatment, biodiesel, algae oil
extraction, and alcoholic beverage enhancement.
Management's Plan Regarding Going Concern
The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted
accounting principles which contemplate continuation of the Company as a going concern. During the three months ended September 30,
2013, the Company incurred a net loss of $345,492. As of September 30, 2013, the Company had a working capital deficiency of $2,713,734 and a
stockholders' deficit of $2,472,022. These factors, among others, raise substantial doubt about the Company's ability to continue as a going
concern. Our independent auditors, in their report on our audited financial statements for the fiscal year ended June 30, 2013 expressed substantial doubt
about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments to reflect the
possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the
Company to continue as a going concern. Management's plan is to generate income from operations by continuing to license our technology globally
through our strategic partner, the Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $125,000 against future sales.
During the quarter ended September 30, 2013, advances received from Desmet amounted to $250,000. We will also attempt to raise additional debt and/or
equity financing to fund operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or
obtained in sufficient amounts necessary to meet the Company's needs, that the Company will be able to achieve profitable operations or that the Company
will be able to meet its future contractual obligations. Should management fail to obtain such financing, the Company may curtail its operations.
5
Note 2 - Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Cavitation Technologies, Inc. and its wholly owned subsidiary
Hydrodynamic Technology, Inc. Inter-company transactions and balances have been eliminated through consolidation.
Fair Value Measurement
FASB Accounting Standards Codification ("ASC") 820-10 requires entities to disclose the fair value of financial instruments,
both assets and liabilities recognized and not recognized on the balance sheet for which it is practicable to estimate fair value. ASC 820-10 defines the fair
value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September
30, 2013, the carrying value of certain accounts such as inventory, accounts payable, accrued expenses, accrued payroll and short-term loans approximate
fair value due to the short-term nature of such instruments.
The following table presents information about the Company's assets and liabilities measured and reported in the financial
statements at fair value on a recurring basis as of September 30, 2013 and indicates the fair value hierarchy of the valuation techniques utilized to determine
such fair value. The three levels of the fair value hierarchy are as follows:
- Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the
ability to access.
- Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other
inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
- Level 3 - Valuations based on inputs that are unobservable, supported by little or no market activity and that are significant to
the fair value of the assets or liabilities.
Use of Estimates
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the
U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in
valuing our stock options, warrants, convertible notes, and common stock issued for services, among other items. Actual results could differ from these
estimates.
Revenue Recognition
Revenue from the sale of our Nano Reactor® Systems is recognized when persuasive evidence of an agreement exists;
delivery has occurred, including transfer of title and risk of loss for product sales, or services have been rendered for service revenues; the price to the buyer
is fixed or determinable; and collectability is reasonably assured. The Company employs the Milestone Method of Revenue Recognition. Accounting
Standard Codification 605-28-15 describes the Milestone Method as pertaining to R&D deliverables under which the Company satisfies its performance
obligations over a period of time and which a portion or all of the consideration is contingent upon uncertain future events or circumstances. For agreements
that provide for milestone payments such as our agreement with Desmet Ballestra, we adopted ASC 605-28-25, "Revenue Recognition Milestone
Method." The Company used this method of accounting to record revenue associated with the Desmet transactions.
6
Patents
Capitalized patent costs represent legal fees associated with procuring and filing patent applications. The Company
accounts for patents in accordance with ASC 350-30, General Intangibles Other Than Goodwill. The Company has two patents issued in fiscal 2012
and 2011. As of September 30, 2013, we have a total of 20 patents pending. The patents have duration of twenty years from filing date.
We believe that four years is a reasonable estimate based upon our estimate of time until the next generation of reactors is
developed or until other forms of competition appear.
As of September 30 and June 30, 2013 the Company had remaining unamortized patent costs of $70,670 and $70,315 respectively.
Impairment of Intangible and Long-Lived Assets
In accordance with ASC 350-30 (General Intangibles Other than Goodwill), the Company evaluates amortizable
intangibles and long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.
When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or
group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount
over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the
determination is made. Based on the Company annual impairment tests, management believes there is no impairment of its intangibles and long-lived
assets as of September 30, 2013. There can be no assurance, however, that market conditions will not change or demand for the Company's products
under development will continue. Either of these could result in future impairment of intangibles and long-lived assets.
Share-Based Compensation
The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising
transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the
authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and
recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the
authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as
determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity
instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In
certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total
stock-based compensation charge is recorded in the period of the measurement date.
The fair value of the Company's common stock option grant is estimated using the Black-Scholes option pricing model, which uses
certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends. Compensation
expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in
the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.
7
Income Taxes
The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The
Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at anticipated future tax rates, of future
deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance
related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial
statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and
transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or
penalties assessed or paid.
The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition
threshold at the effective date may be recognized or continue to be recognized.
Warranty Policy
The Company provides a limited warranty with every set of reactors sold, typically 2 years. The Company has not
experienced significant claims under its warranty policy, and management determined no accrual for warranty reserve was necessary at September 30,
2013.
Dependence on Desmet Ballestra
Our revenue is almost entirely dependent on Desmet Ballestra who is our exclusive distribution agent with regard to the CTi Nano
Neutralization® System for edible oils (see Note 3).
Basic Income per share
The Company computes the loss per common share using ASC 260, Earnings per Share. The net loss
per common share, both basic and diluted, is computed based on the weighted average number of shares outstanding for the period. The
diluted loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average shares outstanding
assuming all potential dilutive common shares were issued.
As of September 30, 2013, the Company had 13,611,815 stock options and 18,433,867 stock warrants outstanding to purchase
shares of common stock that were not included in the diluted net loss per common share because their effect would be anti-dilutive. The Company also had
$100,000 of outstanding convertible note payable, before discounts, which are convertible into approximately 3,333,333 shares of common stock as of
September 30, 2013 (see Note 5). These items were also not included in the calculation of diluted net loss per common share because their
effect would be anti-dilutive.
Recent Accounting Pronouncements
In January 2013, the FASB issued ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about
Offsetting Assets and Liabilities. This ASU clarifies which instruments and transactions are subject to the offsetting disclosure requirements established by
ASU 2011-11. This guidance is effective for annual and interim reporting periods beginning January 1, 2013. We do not believe the adoption of this update
will have a material effect on our financial position and results of operations.
8
On March 4, 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the
Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign
Entity" ("ASU 2013-05"). ASU 2013-05 updates accounting guidance related to the application of consolidation guidance and foreign
currency matters. This guidance resolves the diversity in practice about what guidance applies to the release of the cumulative translation adjustment into
net income. This guidance is effective for interim and annual periods beginning after December 15, 2013. We do not believe the adoption of this update will
have a material effect on our financial position and results of operations.
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss
Carryforward, a Similar Tax Loss, or a Tax Loss, or a Tax Credit Carryforward Exists. Topic 740, Income Taxes, does not include explicit guidance on the
financial statement presented of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.
There is diversity in practice in the presentation of unrecognized tax benefits in those instances and the amendments in this update are intended to eliminate
that diversity in practice. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The
amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Early adoption is permitted. We do not believe
the adoption of this update will have a material effect on our financial position and results of operations.
Other accounting pronouncements did not or are not believed by management to have a material impact on the Company's present
or future consolidated financial statements.
Note 3 - Agreement with Desmet Ballestra
On May 14, 2012 we signed a global R and D, Marketing and Technology License Agreement with the n.v. Desmet
Ballestra Group s.a. (Desmet), a Belgian company that is actively marketing the NANO Neutralization System, the key component of which is the
Company's reactor to soybean and other vegetable oil refiners. The Agreement provides Desmet (licensee) a limited, exclusive license and right to develop,
design and supply Nano Reactor® systems which incorporate Nano Reactor® devices on a global basis but is limited to oils and fats and oleo
chemical applications. CTi (licensor) remains owner of the current patents and patent applications but Desmet will be co-owner of any new process patent
applications jointly developed. Desmet has agreed to provide, under certain conditions, limited monthly advance payments of $125,000 against future sales
to CTi. Desmet shall be entitled to immediately terminate the present agreement in case the claims of current US Patent Application Number 12/484,981 are
not granted as such or are cancelled. In addition, Desmet may terminate the agreement on August 1 of any particular year if they have not installed at least
6 Nano Reactor® devices in the previous 12 month period. CTi may terminate the Agreement for material default. This Agreement supersedes a
previous agreement dated November 1, 2010, amended on June 1, 2011 and on September 2, 2011.
Desmet, together with its affiliates, is a global engineering and equipment supply firm engaged in the development, design and
supply of process equipment for oils and fats processing facilities including vegetable oil refining, biofuel, oleo chemical, seed crushing, surfactant and
detergent markets. Desmet supplies these markets with competitive services based on the latest globally sourced technologies.
The Company and Desmet have worked together to determine the appropriate sales approach and installation process. The
Company's Nano Neutralization is designed to be used as an add-on process to an existing neutralization system within soybean and other vegetable oil
refineries. Desmet purchases Nano Reactor Systems from the Company and installs them at the refinery as part of an integrated neutralization system. We
are therefore substantially dependent on Desmet to identify prospects, complete sales contracts, install the system and manage relationships with end-
users.
During the fiscal quarters ended September 30, 2013 and 2012, we recorded no revenues from Desmet or otherwise. The Company
received advances of $250,000 in each three months ended September 30, 2013 and 2012. As of September 30, 2013, Desmet has advanced to us an
excess of funds of $1,465,663 which will be recognized as revenue as sales orders are shipped.
9
Note 4 - Property and Equipment
Property and equipment consisted of the following as of September 30, 2013 and June 30, 2013:
|
|
|
September 30, |
|
|
June 30, |
|
|
|
2013 |
|
|
2013 |
|
|
|
|
|
|
|
Leasehold improvement |
|
$ |
2,475 |
|
$ |
2,475 |
Furniture |
|
|
26,837 |
|
|
26,837 |
Office equipment |
|
|
1,506 |
|
|
1,498 |
Equipment |
|
|
81,872 |
|
|
68,380 |
Systems |
|
|
225,086 |
|
|
225,086 |
|
|
|
337,776 |
|
|
324,276 |
Less: accumulated depreciation and amortization |
|
|
(176,234) |
|
|
(158,208) |
Property and equipment, net |
|
$ |
161,542 |
|
$ |
166,068 |
Depreciation expense for the three months ended September 30, 2013 and 2012 amounted to $18,026 and $12,911, respectively.
Note 5 - Convertible Note
On December 17, 2012 we issued a convertible promissory note payable to a private party, in the amount of $100,000 with an
interest rate of 12% per annum and due May 31, 2014. The note is unsecured, convertible into shares of our common stock at a conversion price of $0.03
any time during the life of the note. The note was still outstanding as of September 30, 2013. Upon issuance of the note, the trading price of the Company's
common stock was also $0.03/share which is the same as the note's conversion price. As such, there was no beneficial conversion feature. Also, 3,333,333
fully vested warrants with a fair value of $90,106 were issued in connection with this note. The warrants are exercisable at $0.07/share and will expire in 3
years. The fair value of the warrants was recorded as a note discount and is being amortized to interest expense over the term of the note. As of June 30,
2013, the outstanding balance of note amounted to $44,826 consisting of outstanding principal of $100,000 less discount of $55,174.
During the three months ended September 30, 2013, the Company recognized and paid interest expense of $3,000 and amortized
the note discount for $15,018. As of September 30, 2013, the outstanding balance of Convertible Notes Payable (net of discount) as recorded on the
balance sheet amounted to $59,844 consisting of outstanding principal of $100,000 less discount of $40,156 and with unpaid interest of $1,000.
Note 6 - Short-Term Loan, Related Party
As of June 30, 2013, we had received a loan of $185,000 from West Point Partners, LLC, whose managing partner is the
Company's Principal Accounting Officer. The loan is due on demand, unsecured and pays an annual interest rate of 12% per annum. Accrued interest as of
June 30, 2013 amounted to $26,650.
During the three months ended September 30, 2013, the Company recognized interest expense of $5,550. As of September 30,
2013, the entire loan of $185,000 is still outstanding with unpaid interest of $32,200.
10
Note 7 - Short-Term Loan
As of June 30, 2013, we had received a loan of $34,521 from a third party, Strategic IR. The loan is due on demand, unsecured
and pays an annual interest rate of 12% per annum. Accrued interest as of June 30, 2013 amounted to $4,950.
During the three months ended September 30, 2013, the Company recognized interest expense of $1,036. As of September 30,
2013, the entire loan of $34,521 is still outstanding with unpaid interest of $5,986.
Note 8 - Accrued Payroll and Payroll Taxes
As of September 30, 2013 and June 30, 2013, the Company had accrued unpaid salaries due to officers amounting to $966,966
and $966,966 respectively. In addition, the Company also accrued the estimated payroll taxes due to this unpaid payroll of $79,357 and $79,357
respectively.
Note 9 - Stockholders' Deficit
Stock Options
The Company has not adopted a formal stock option plan, however, it has assumed outstanding stock options resulting
from the acquisition of its wholly-owned subsidiary, Hydrodynamic Technology, Inc. In addition, the Company has made periodic non- plan grants. A
summary of the stock option activity from September 30, 2013 is as follows:
|
|
|
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
Weighted- |
|
|
Remaining |
|
|
|
|
|
Average |
|
|
Contractual |
|
|
|
|
|
Exercise |
|
|
Life |
|
|
Options |
|
|
Price |
|
|
(Years) |
|
|
|
|
|
|
|
|
|
Outstanding June 30, 2013 |
|
13,611,815 |
|
$ |
0.10 |
|
|
7.92 |
|
|
|
|
|
|
|
|
|
Granted |
|
- |
|
|
- |
|
|
- |
Forfeited |
|
- |
|
|
- |
|
|
- |
Exercised |
|
- |
|
|
- |
|
|
- |
Expired |
|
- |
|
|
- |
|
|
- |
Outstanding September 30, 2013 |
|
13,611,815 |
|
$ |
0.10 |
|
|
7.92 |
Exercisable at September 30, 2013 |
|
13,611,815 |
|
$ |
0.10 |
|
|
7.92 |
Vested at September 30, 2013 |
|
13,611,815 |
|
$ |
0.10 |
|
|
7.92 |
11
At June 30, 2013, all outstanding stock options are fully vested. The intrinsic value of the outstanding
options was $118,009 as of September 30, 2013. The following table summarizes additional information concerning options outstanding and exercisable at
September 30, 2013.
|
|
|
Options Outstanding |
|
Options Exercisable |
|
|
|
|
|
Weighted |
|
|
Weighted |
|
|
|
|
Weighted |
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
Average |
|
Exercise |
|
Number |
|
Remaining |
|
|
Exercise |
|
Number |
|
|
Remaining |
|
Price |
|
of Shares |
|
Life (Years) |
|
|
Price |
|
of Shares |
|
|
Life (Years) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.03 |
|
11,800,858 |
|
7.92 |
|
$ |
0.03 |
|
11,800,858 |
|
|
7.92 |
$ |
0.33 |
|
637,297 |
|
3.06 |
|
$ |
0.33 |
|
637,297 |
|
|
3.06 |
$ |
0.67 |
|
1,173,660 |
|
3.43 |
|
$ |
0.67 |
|
1,173,660 |
|
|
3.43 |
|
|
|
13,611,815 |
|
|
|
|
|
|
13,611,815 |
|
|
|
Warrants
A summary of the Company's warrant activity and related information for the three months ended on
September 30, 2013 is as follows.
|
|
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
Average |
|
|
|
|
|
Weighted- |
|
Remaining |
|
|
|
|
|
Average |
|
Contractual |
|
|
|
|
|
Exercise |
|
Life |
|
|
Warrants |
|
|
Price |
|
(Years) |
|
|
|
|
|
|
|
|
Outstanding at June 30, 2013 |
|
18,433,867 |
|
$ |
0.09 |
|
6.49 |
|
|
|
|
|
|
|
|
Granted |
|
- |
|
|
- |
|
- |
Exercised |
|
- |
|
|
- |
|
- |
Expired |
|
- |
|
|
- |
|
- |
Vested at September 30, 2013 |
|
18,433,867 |
|
$ |
0.09 |
|
6.49 |
Vested and expected to vest at September 30, 2013 |
|
18,433,867 |
|
$ |
0.09 |
|
6.49 |
Exercisable at September 30, 2013 |
|
18,433,867 |
|
$ |
0.09 |
|
6.49 |
At June 30, 2013, all outstanding warrants are fully vested. The intrinsic value of the outstanding options was $0 as
of September 30, 2013. The following table summarizes additional information concerning warrants outstanding and exercisable at September 30, 2013.
|
|
|
Warrants Outstanding |
|
Warrants Exercisable |
|
|
|
|
|
Weighted |
|
|
Weighted |
|
|
|
|
Weighted |
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
Average |
|
Exercise |
|
Number |
|
Remaining |
|
|
Exercise |
|
Number |
|
|
Exercise |
|
Price |
|
of Shares |
|
Life (Years) |
|
|
Price |
|
of Shares |
|
|
Price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.05 - 0.07 |
|
15,703,933 |
|
7.51 |
|
$ |
0.06 |
|
15,703,933 |
|
$ |
0.06 |
$ |
0.20 - 0.37 |
|
929,934 |
|
0.37 |
|
$ |
0.28 |
|
929,934 |
|
$ |
0.28 |
$ |
0.42 - 0.58 |
|
1,800,000 |
|
0.67 |
|
$ |
0.55 |
|
1,800,000 |
|
$ |
0.55 |
|
|
|
18,433,867 |
|
|
|
|
|
|
18,433,867 |
|
|
|
12
Note 10 - Income Taxes
Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 34% to income
before income tax expense as a result of the NOL carry forward. Therefore, the company's effective tax rate is 0.0%. The Company files income tax returns
in the United States ("Federal") and California ("State") jurisdictions. The Company is subject to Federal and State income tax examinations by tax
authorities for all years since its inception.
At September 30, 2013, the Company had Federal and State net operating loss carry forwards available to offset future taxable
income of approximately $8.1 million and $8.1 million, respectively. These carry forwards will begin to expire in the years ending June 30, 2027 and June 30,
2017, respectively, subject to Internal Revenue Services (IRS) limitations, including change in ownership.
The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the
deferred tax assets by a valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The
Company considers many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative earnings
experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to us for tax reporting purposes, and
other relevant factors.
At September 30, 2013, based on the weight of available evidence, including cumulative losses in recent years and expectations of
future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized. Accordingly, the Company
has recorded a valuation allowance for 100% of its cumulative deferred tax assets.
As a result of the implementation of certain provisions of ASC 740-10, the Company performed an analysis of its previous tax filings
and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of September 30,
2013.
Future changes in the unrecognized tax benefit are not expected to have an impact on the effective tax rate due to the existence of
the valuation allowance. The Company estimates that the unrecognized tax benefit will not change within the next twelve months. The Company will
continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its consolidated statements of operations. There is no
interest or penalties accrued as of September 30, 2013.
The following summarizes the open tax years for each major jurisdiction:
Jurisdiction |
|
Open Tax Years |
|
|
|
Federal |
|
2008 - 2012 |
|
|
|
California |
|
2007 - 2012 |
The Company's net operating loss carry forwards are subject to IRS examination until they are utilized and such tax
years are closed.
13
Note 11 - Commitments and Contingencies
On July 1, 2008, our wholly owned subsidiary entered into Patent Assignment Agreements with two parties, our President as
well as our former CEO and current CTO, where certain devices and methods involved in the hydrodynamic cavitation processes invented by the President
and former CEO/current CTO have been assigned to the Subsidiary. In exchange, that Subsidiary agreed to pay a royalty of 5% of gross
revenues to each of the CTO and President and former CEO for licensing of the technology and leasing of the related equipment embodying the technology.
These agreements were subsequently assumed by Cavitation Technologies on May 13, 2010 from its subsidiary. The Company's CTO and President
both waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through September 30,
2013.
On April 30, 2008 (as amended November 22, 2010), our wholly owned subsidiary entered into an employment agreement with the
Director of Chemical and Analytical Department (the "Inventor")who shall receive an amount equal to 5% of actual gross royalties received from the royalty
stream in the first year in which the Company receives royalty payments from the patent which the Inventor was the legally named inventor, and 3% of
actual gross royalties received by the Company resulting from the patent in each subsequent year. As of September 30, 2013, no patents have been
granted in which this person is the legally named inventor.
14
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our financial statements and the related notes. This
discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as its plans, objectives,
expectations and intentions. Its actual results and the timing of certain events could differ materially from those anticipated in these forward-looking
statements.
Overview of our Business
Hydrodynamic Technology, Inc. was incorporated January 29, 2007 as a California corporation. It is a wholly owned subsidiary
of Cavitation Technologies, Inc., a Nevada corporation originally incorporated under the name Bio Energy, Inc. We design and engineer environmentally
friendly technology based systems that are designed to serve large, growing, global markets such as vegetable oil refining, renewable fuels, water
treatment, algae oil extraction, biodiesel production, water-oil emulsions and crude oil yield enhancement. Our systems are designed to
process industrial liquids at a lower cost and higher yield than conventional technology. We are a process and product development firm that has developed,
patented, and commercialized proprietary technology.
CTi has developed, patented, and commercialized proprietary technology that can be used for processing of industrial fluids. CTi's
patented Nano Reactor® is the critical components of the CTi Nano Neutralization® System which is commercially proven to reduce
operating costs and increase yields in processing oils and fats. CTi has two issued patents relating to our Nano Reactor® systems and has filed
several national and international patents to employ its proprietary technology in applications including, vegetable oil refining, biodiesel production, waste
water treatment, algae oil extraction, and alcoholic beverage enhancement.
During the three months ended September 30, 2013, we recorded no revenue. Our loss from operations in Q1 2014 is $345,492.
Cumulative net cash used in operating activities of $59,992 and net cash used in investing activities of $20,322 was funded largely with Company's cash
reserves at the beginning of the period.
Management's Plan
We are engaged in merchandising our Neutralization System which is designed to help refine vegetable oils such as
soybean, canola, sunflower and rapeseed. Our near term goal is to continue to merchandise our systems through our partner, Desmet
Ballestra. Even though the Company's revenue increased significantly in last fiscal year, the Company incurred a net loss of $345,492 in the current fiscal
quarter. As of September 30, 2013, the Company had a working capital deficiency of $2,713,734 and a stockholders' deficit of
$2,472,022. The accompanying financial statements have been prepared in conformity with generally accepted accounting principles which
contemplate continuation of the Company as a going concern.
Management's plan is to generate income from operations by licensing our technology globally through our strategic partner, the
Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $125,000 against future sales. During the three months ended
September 30, 2013, advances received from Desmet amounted to $250,000 and we received a total of $1,875,000 as of October 15, 2013. These funds
service interest plus a portion of operational expenses on a monthly basis. Desmet shall be entitled to immediately terminate the present agreement in case
the claims of current US Patent Application Number 12/484,981 are not granted as such or are cancelled. In addition, Desmet may terminate the agreement
on August 1 of any particular year if they have not installed at least 6 Nano Reactor® devices in the previous 12 month period. CTi may terminate the
Agreement for material default. This Agreement supersedes a previous agreement dated November 1, 2010, amended on June 1, 2011 and on September
2, 2011. In addition to these advances, we anticipate that we will need additional funding, and we will attempt to raise additional debt and/or equity financing
to fund operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in
sufficient amounts necessary to meet the Company's needs, or that the Company will be able to meet its future contractual obligations. Should management
fail to obtain such financing, the Company may curtail its operations.
15
The accompanying condensed consolidated financial statements do not include adjustments to reflect the possible future effects on
the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the Company to continue as a
going concern. As a result of the aforementioned factors, our independent auditors, in their report on our audited financial statements for the fiscal year
ended June 30, 2013, expressed substantial doubt about our ability to continue as a going concern.
Critical Accounting Policies
CTi's critical accounting policies and estimates are included in its Annual Report on Form 10-K for the year ended June 30, 2013, and did not
change for the three months ended September 30, 2013.
Results of Operations
The following is a comparison of our results of operations for the three months ended September 30, 2013 and 2012.
|
|
|
For the Quarter Ended |
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
2013 |
|
|
2012 |
|
|
$ Change |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
0.0% |
Cost of revenue |
|
|
- |
|
|
- |
|
|
- |
|
0.0% |
Gross profit |
|
|
- |
|
|
- |
|
|
- |
|
0.0% |
General and administrative expenses |
|
|
312,765 |
|
|
361,906 |
|
|
(49,141) |
|
-13.6% |
Research and development expenses |
|
|
6,123 |
|
|
40,163 |
|
|
(34,040) |
|
-84.8% |
Total operating expenses |
|
|
318,888 |
|
|
402,069 |
|
|
(83,181) |
|
-20.7% |
Loss from operations |
|
|
(318,888) |
|
|
(402,069) |
|
|
83,181 |
|
-20.7% |
Interest expense and other |
|
|
(26,604) |
|
|
(46,957) |
|
|
20,353 |
|
-43.3% |
Net loss before income tax expense |
|
|
(345,492) |
|
|
(449,026) |
|
|
103,534 |
|
-23.1% |
Income tax expense |
|
|
- |
|
|
- |
|
|
- |
|
- |
Net loss |
|
$ |
(345,492) |
|
$ |
(449,026) |
|
$ |
103,534 |
|
-23.1% |
Revenue
We recorded no revenue in the first quarter of fiscal 2014 or fiscal 2013.
Operating Expenses
Operating expenses for the three months ended September 30, 2013 amounted to $318,888 compared with $402,069 for the same
period in 2012, a decrease of $83,181, or 21%. In both periods, the major expense component was compensation, most of which was accrued in Q1 2013
but paid in cash in the current period. In the first quarter of fiscal 2014, compensation amounted to $91,815 or 29% of total costs compared with $236,999,
or 60% in the first quarter of fiscal 2013. This decrease in compensation in the first quarter of fiscal 2014 was attributable largely to the reduction in a
number of management positions and their base salaries.
During the first quarter of 2014, the other major component of operating expense was professional service fees related to auditors,
accounting, and legal services which amounted to $76,284 or 24% of total operating expenses versus $43,046, or 11% in the first quarter of fiscal 2013.
These expenses were substantially higher in the first quarter of fiscal 2013 as we increased reliance on third-party service providers rather than
management, and the new auditor firm was engaged.
16
R&D expenses remained relatively low as we continued to rely on Desmet Ballestra for support in R&D. It is our intention
to pursue R&D as our cash position permits.
Interest Expense
Interest expense of $26,604 during current quarter was composed of non-cash expenses of $22,978, $15,018 of which related to
convertible note amortization, and $6,585 to accrued interest on short term loans outstanding. Cash interest of $3,000 was paid to a Convertible Note
holder. In the first quarter of fiscal 2013, Interest Expense of $46,957 consisted of a non-cash expense of $26,587 relating to convertible notes and $14,600
in non-cash, accrued interest relating primarily to short term loans. Cash interest payments on our loan from the National Bank of California were $5,770 in
Q1 2013.
As of September 30, 2013, the outstanding balance of Convertible Notes Payable (net of discount) as recorded on the balance sheet amounted to
$59,844 consisting of outstanding principal of $100,000 less discount of $40,156.
Liquidity and Capital Resources
The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted
accounting principles which contemplate continuation of the Company as a going concern. During the three months ended September 30,
2013, the Company incurred a net loss of $345,492. As of September 30, 2013, the Company had a working capital deficiency of $2,713,734 and a
stockholders' deficit of $2,472,022. These factors, among others, raise substantial doubt about the Company's ability to continue as a going
concern. Our independent auditors, in their report on our audited financial statements for the fiscal year ended June 30, 2013 expressed substantial doubt
about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments to reflect the
possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the
Company to continue as a going concern.
Management's plan is to generate income from operations by continuing to license our technology globally through our strategic
partner, the Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $125,000 against future sales. During the quarter
ended September 30, 2013, advances received from Desmet amounted to $250,000. We will also attempt to raise additional debt and/or equity financing to
fund operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient
amounts necessary to meet the Company's needs, that the Company will be able to achieve profitable operations or that the Company will be able to meet
its future contractual obligations. Should management fail to obtain such financing, the Company may curtail its operations.
On September 30, 2013, we had cash on hand in the amount of $161,662. In addition to the funds on hand, we will require additional
funds to continue to operate our business. This includes expenses we will incur in connection with costs to manufacture and ship our products; costs to
design and implement an effective system of internal controls and disclosure controls and procedures; costs of maintaining our status as a public company
by filing periodic reports with the SEC and costs required to protect our intellectual property. In addition, we have contractual commitments for salaries to our
executive officers. In light of our financial commitments over the next several months and its liquidity constraints, we have implemented cost reduction
measures in all areas of operations. We intend to review these measures on an ongoing basis and make additional decisions as may be required.
17
Cash Flow
Net cash used in operating activities during the three months ended September 30, 2013 amounted to $59,992 compared with $444
for the same period in fiscal 2013. Funding for the operating and investing activities was provided by $250,000 in advances from our distributor, and partially
from cash reserves. For the first quarter of fiscal 2014, we paid $91,815 in compensation, $95,074 in fixed operating costs, $76,284 in professional services
fees, $22,443 in various insurance premiums, and $3,000 in interest payments, and other obligations of about $39,000. In Q1 2013, cash was used to pay
$42,394 in fixed operating costs, $58,325 in compensation, $57,920 in professional service fees, $8,926 in manufacturing costs, $16,701 in marketing and
sales and $35,355 in interest payments. We paid other obligations amounting to $32,192.
Net cash used in investing activities during the three months ended September 30, 2013 was relating to $6,822 in capitalized patents
and $13,500 for property, plant, and equipment. During the same period ended September 30, 2012, we invested $11,050 in capitalized patents and
$21,989 in property, plant and equipment.
For the first quarter of fiscal 2013, funding was provided from proceeds of $53,000 from issuance of our convertible note. We used
the convertible note funding to repay $55,000 in existing convertible debt and $68,000 in principal on the bank loan.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable for smaller reporting companies.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In accordance with rule 13a-15(a), CTi management must maintain disclosure controls and procedures as defined in Rule 13a-
15(e) of the Securities and Exchange Act of 1934, or the Exchange Act, to provide reasonable assurance that information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms, and accumulated and communicated to the Company's management, including its principal
executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
In accordance with Rule 13a-15(b) and (c), management must also evaluate the effectiveness of these disclosure control and
procedures at the end of each fiscal year. As of September 30, 2013, the Company carried out an evaluation, under the supervision and with the
participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based upon that evaluation, the Company's principal executive officer and principal financial officer concluded that these
disclosure controls and procedures were not effective as of September 30, 2013.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting during the first quarter of fiscal 2014 that have materially
affected or are reasonably likely to materially affect the company's internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
We know of no material, existing or pending legal proceeding against our Company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our interest.
18
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 - Defaults Upon Senior Securities
None
Item 4 - (Removed and Reserved)
Item 5 - Other Information
None
Item 6 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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Incorporated by Reference |
Exhibit |
|
Filed |
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|
Number |
Exhibit Description |
Herewith |
Form |
Pd. Ending |
Exhibit |
Filing Date |
|
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|
|
|
3(i)(a) |
Articles of Incorporation - original name of Bioenergy, Inc. |
|
SB-2 |
N/A |
3.1 |
October 19, 2006 |
3(i)(b) |
Articles of Incorporation - Amended and Restated |
|
10-Q |
December 31, 2008 |
3-1 |
February 17, 2009 |
3(i)( c ) |
Articles of Incorporation - Amended and Restated |
|
10-Q |
June 30, 2009 |
3-1 |
May 14, 2009 |
3(i)(d) |
Articles of Incorporation - Amended; increase in authorized shares |
|
8-K |
N/A |
N/A |
October 29, 2009 |
3(i)(e) |
Articles of Incorporation - Certificate of Amendment; forward split |
|
10-Q |
September 30, 2009 |
3-1 |
November 16, 2009 |
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|
10.1 |
Patent Assignment Agreement between the Company and Roman Gordon dated July 1, 2008. |
|
8-K |
June 30, 2009 |
10.1 |
May 18, 2010 |
10.2 |
Patent Assignment Agreement between the Company and Igor Gorodnitsky dated July 1, 2008. |
|
8-K |
June 30, 2009 |
10.2 |
May 18, 2010 |
10.3 |
Assignment of Patent Assignment Agreement between the Company and Roman Gordon |
|
8-K |
June 30, 2009 |
10.3 |
May 18, 2010 |
10.4 |
Assignment of Patent Assignment Agreement between the Company and Igor Gorodnitsky |
|
8-K |
June 30, 2009 |
10.4 |
May 18, 2010 |
10.5 |
Employment Agreement between the Company and Roman Gordon date March 17, 2008 |
|
10K/A |
June 30, 2009 |
10.3 |
October 20, 2011 |
10.6 |
Employment Agreement between the Company and Igor Gorodnitsky dated March 17, 2008 |
|
10K/A |
June 30, 2009 |
10.4 |
October 20, 2011 |
10.7 |
Employment and Confidentiality and Invention Assignment Agreement between the Company and Varvara Grichko dated April 30, 2008 |
|
10-Q |
December 31, 2010 |
10.3 |
February 11, 2011 |
10.8 |
Board of Director Agreement - James Fuller |
|
10-Q |
December 31, 2011 |
10.12 |
October 20, 2011 |
10.9 |
Technology and License Agreement with Desmet Ballestra dated 14 May 2012 |
|
10-K |
June 30, 2012 |
10.1 |
October 15, 2012 |
10.10 |
Short Term Loan Agreement - CEO |
|
10-K |
June 30, 2012 |
10.11 |
October 15, 2012 |
10.11 |
Loan Agreement - Desmet Ballestra - Oct. 26, 2010 |
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|
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14.1 |
Code of Business Conduct and Ethics* |
|
10-K |
June 30, 2011 |
14.1 |
September 28, 2011 |
31.1 |
Certificate of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 |
X |
|
|
|
|
31.2 |
Certificate of Principal Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 |
X |
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|
32.1 |
Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted |
X |
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pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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32.2 |
Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted |
X |
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pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101.INS |
XBRL Instance Document |
X |
|
|
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101.SCH |
XBRL Taxonomy Extension Schema |
X |
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101.CAL |
XBRL Taxonomy Extension Calculation Linkbase |
X |
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101.DEF |
XBRL Taxonomy Extension Definition Linkbase |
X |
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|
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101.LAB |
XBRL Taxonomy Extension Label Linkbase |
X |
|
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101.PRE |
XBRL Taxonomy Extension Presentation Linkbase |
X |
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* |
In accordance with Regulation S-K 406 of the Securities Act of 1934, we undertake to provide to any person |
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without charge, upon request, a copy of our "Code of Business Conduct and Ethics". A copy may be requested |
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by sending an email to info@cavitationtechnologies.com. |
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19
SIGNATURES
Pursuant to the requirements of the securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
SIGNATURE |
|
TITLE |
|
DATE |
|
|
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|
|
/s/ Igor Gorodnitsky |
|
President; Member of Board of Directors |
|
November 19, 2013 |
Igor Gorodnitsky |
|
(Principal Executive Officer) |
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|
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|
|
|
|
/s/ N. Voloshin |
|
Principal Accounting Officer |
|
November 19, 2013 |
N. Voloshin |
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|
/s/ Jim Fuller |
|
Audit Committee Chairman, Independent Financial Expert |
|
November 19, 2013 |
Jim Fuller |
|
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|
|
20
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